The blue-chip index tumbled as markets around the world plunged.

Worries the US was closer to bringing its economic stimulus measures to an end and concern over the state of the Chinese economy triggered a huge global sell-off today, with the FTSE 100 falling from its highest level in thirteen years.

London’s blue-chip shares dropped 143.48 points, or 2.1pc, to 6,696.79. It was the biggest fall in the benchmark index for a year and wiped £36.55bn off the value of Britain’s largest companies.

The second-tier FTSE 250, which is made up of smaller companies than those on the main board, also plunged 316.42 points to 14,507.72, a 2.1pc loss that knocked the index from a record high.

Those moves were mirrored by equity markets around the world. The Dax in Germany lost 2.1pc to 8,351.98 – tumbling from a record high – and France’s Cac 40 also slid 2.1pc to 3,967.15. In Japan, the Nikkei 225 plunged 7.3pc, its biggest one-day points fall since April 2000.

Nick Lewis, head of risk at Capital Spreads, said: “What started out as uncertainty over Ben Bernanke’s messages on monetary stimulus quickly became panic over weak Chinese data.”

Every stock fell in Japan’s benchmark index, the first time there has been a blanket retreat since April 2005. Investors banked recent profits on the back of Chinese data from HSBC and Markit that showed manufacturing in the world’s second largest economy contracted for the first time in seven months. The wider Topix index fell 6.9pc to 1,188.34.

Before Thursday’s stock market plunge, the Nikkei had risen by 50pc this year, buoyed by Japanese prime minister’s Shinzo Abe’s pledge to “smash deflation” and end two decades of low growth. Since he took office in December, the Bank of Japan has unleashed a raft of stimulus measures, including a promise to inject about $1.4 trillion into the economy in under two years.

Elsewhere in global stock markets, the Dow Jones Industrial Average continued to fall after shedding 0.5pc in the wake of the Congressional testimony from US Federal Reserve chairman Ben Bernanke.

The central bank chief said late on Wednesday that the Fed could begin to rein in economic stimulus measures if the American economy continues to improve. This served to unnerve markets, as did the minutes from the latest Federal Open Market Committee meeting, showing that some members thought bond buying could be slowed at next month’s summit.

But economic data from the US was mixed today. While Markit’s manufacturing purchasing managers index showed that growth in factory activity in May was at its slowest in seven months, new jobs data showed that weekly unemployment benefit claims declined by 23,000. Improving news on the economy can have the almost paradoxical effect of unnerving stock market traders as it raises the prospect of a slowdown in stimulus.

Actions taken by central banks around the world to encourage economic growth are widely viewed as having driven this year’s global equity rally, which earlier this month saw stock markets in the US reach all-time highs. Easing measures have driven yields in the bond market lower, making shares more attractive to investors.

Douglas McNeill, investment director at stockbroker Charles Stanley, said today’s FTSE 100 fall demonstrated that quantitative easing is “a really important part of the equation”.

“Ultimately, QE is going to have to be unwound, and we have to come to terms with that fact,” he added.

Until today, the blue-chip FTSE 100 index of leading shares stood a mere 90 points from its record closing high of 6,930.2, which some had expected it to break through in coming days.

Bullish investors had this week sent the benchmark index surging to its highest level since December 1999, taking it back to levels not seen since the infamous dotcom bubble. Many City analysts have predicted the FTSE 100 will climb above 7,000 this year.

“If the central bank liquidity is coming to an end, the market comes down because the fundamentals aren’t strong enough to keep the market up,” said Gerard Lane, an equity strategist at broker Shore Capital.

Gold, a traditional safe-haven for investors concerned about the state of the economy, has suffered this year amid investor demand for riskier assets. However, the widespread fall in stocks saw investor appetite for the yellow metal return, with the gold price advancing 1.6pc to $1392.50, its first rise since Monday.